Two owners of a Chinese company built their business by stealing Tesla Inc’s battery assembly line technology, US prosecutors alleged in a complaint unsealed Tuesday in Brooklyn.
Court documents referred to the victimized company as a leading electric vehicles manufacturer, providing further details that matched Tesla. A source familiar with the matter confirmed Tesla is in fact the company from whom the defendants are accused of stealing trade secrets.
They allegedly started selling Tesla’s proprietary battery production technology under their own business startup in China. One of the defendants—a Canadian named Klaus Pflugbeil—was arrested in Nassau County, New York Tuesday after attempting to sell the technology to undercover agents posing as Long Island businesspeople, the Justice Department said.
Pflugbeil’s co-owner, Chinese national Yilong Shao, remains at large.
“This blatant theft of advanced trade secrets relating to battery components and assembly blunts America’s technological edge, and the Justice Department will hold accountable those who would so try cheat our country of its economic potential and threaten our national security,” said Matthew Olsen, the head of DOJ’s national security division, in a statement.
The case was coordinated by a strike force launched by DOJ and the Commerce Department last year designed to prevent adversaries from acquiring essential US technology. That strike force was also responsible for the arrest this month of a former Alphabet Inc. engineer for allegedly stealing Google’s AI trade secrets while working for two Chinese companies.
US Magistrate Judge Peggy Kuo ordered Pflugbeil detained until a hearing scheduled for Friday. Pflugbeil didn’t provide a plea during this initial appearance.
Brooklyn-based Assistant US Attorney Ellen Sise represented the government in court Tuesday. Sise and her supervisors declined to comment.
Pflugbeil is the former president of a Canadian battery manufacturer, which was acquired by the EV company in October 2019, prosecutors said in a court filing. Tesla purchased Ontario-based Hibar Systems, which specializes in high-speed electric vehicle battery production, that same month.
A Linkedin account belonging to a Klaus Pflugbeil shows he was formerly employed at Hibar.
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